A Melbourne property developer has settled a lawsuit with the Commonwealth Bank over a scam he says was masterminded by fraud accountants.

Nick Fotopoulos claimed more than $2.4 million was fraudulently transferred from his account to people he didn’t know during the construction of townhouses nearly a decade ago.

He sought total damages of about $5.2 million from the bank but the parties settled the suit out of court for an undisclosed sum during mediation on Thursday.

“Following the start of the court case this week which included opening statements by both sides, we have since engaged in mediation as directed by the judge and we are pleased to say we have reached a successful settlement with Mr Fotopoulos,” a bank spokesman said.

The Supreme Court trial opened on Monday when professional poker player and finance broker Bill Jordanou and accountant Robert Zaia were named as the alleged masterminds of the scam.

In late 2008, Mr Fotopoulos took a loan to buy a block of land in South Yarra for about $3.1 million and borrowed a further $3.3 million for construction.

A series of transfers were then made in quick succession from Mr Fotopoulos’s account to other people or entities, allegedly including some to a Zaia family trust.

“Mr Fotopoulos has no idea who these people are,” barrister Joseph Tsalanidis told the court earlier this week.

The lawyer described the alleged fraud as a “Ponzi scheme”, a scam named after 1920s Italian swindler Charles Ponzi.

Jordanou helped Mr Fotopoulos secure the loan from the bank. It’s understood he worked closely with Zaia.

Fraudulent faxes were allegedly sent from accounting firm Zaia Arthur and Associates to the bank with Mr Fotopoulos’s signature on them, authorising the payments.

No one from the bank ever called Mr Fotopoulos about the transfers and they should not have been processed, lawyers said.

“The bank should be on alert when it comes to fax transactions,” Mr Tsalanidis said.

Mr Fotopoulos only realised what was happening after a call in late 2011 informed him his account was in arrears.

The judge heard Jordanou and Zaia were also on the bank’s radar at the time in relation to similar conduct.

By Rick Goodman